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Capital Appreciation Fund

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Dictionary Says

Definition of 'Capital Appreciation Fund'

A mutual fund that attempts to increase asset value primarily through investments in growth stocks. The heavy investment in growth stocks increases the risk associated with these types of funds.

Also called "aggressive growth fund".
Investopedia Says

Investopedia explains 'Capital Appreciation Fund'

As its name suggests, a capital appreciation fund seeks to deliver value to shareholders by investing in companies with appreciating share prices.

This type of fund is the exact opposite of an income or dividend fund, which focuses on investing in companies that pay shareholders a dividend. In addition to risk tolerance, something else to consider when analyzing these different types of funds is the fact that capital gains are usually taxed lower than interest income.

Related Definitions

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    Capital Appreciation

    A rise in the value of an asset based on a rise in market price. Essentially, the capital that was invested in the security has increased in value, and the capital appreciation portion ...
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  • Appreciation

    An increase in the value of an asset over time. The increase can occur for a number of reasons including increased demand or weakening supply, or as a result of changes in inflation or ...
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  • Depreciation

    1. A method of allocating the cost of a tangible asset over its useful life. Businesses depreciate long-term assets for both tax and accounting purposes. 2. A decrease in an asset’s ...
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    • Capital Gain

      1. An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A ...
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    • Return On Capital Gains

      The return that one gets from an increase in the value of a capital asset (investment or real estate).
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    • Income Fund

      A type of mutual fund that emphasizes current income, either on a monthly or quarterly basis, as opposed to capital appreciation. Such funds hold a variety of government, municipal and ...
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    • Aggressive Growth Fund

      A mutual fund that attempts to achieve the highest capital gains. Investments held in these funds are companies that demonstrate high growth potential, usually accompanied by a lot of ...
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    • Dividend

      1. A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. The dividend is most often quoted in terms of the dollar amount ...
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    • Mutual Fund

      An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and ...
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    • Risk Tolerance

      The degree of uncertainty that an investor can handle in regard to a negative change in the value of his or her portfolio.
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